International Consolidated Airlines Group S.A. (BAY.L, BAIRY.PK,IAG.L) Thursday said it has reached an agreement with Boeing Co. (BA) on new longhaul aircraft for the group's fleet, including conversion of some existing Boeing 787 Dreamliners options into firm orders.
IAG has decided to convert 18 existing Boeing 787s options into firm orders for British Airways. They will be used to replace some of the airline's Boeing 747-400 aircraft between 2017 and 2021. British Airways already has 24 Boeing 787s on order.
IAG's decision comes at a critical time for Boeing, which is trying to resolve some battery issues related to its 787 Dreamliner that have led to the grounding of those planes. In late March, the 787 Dreamliner did a test flight after installing a new battery system.
For Iberia, IAG has reached agreement with Boeing to secure commercial terms and delivery slots that could result in an order for Boeing 787s. Firm orders will be made when Iberia is read to go profitable and reduces costs.
British Airways' 787s will be powered by Rolls-Royce Trent 1000 engines. The engine order includes a comprehensive maintenance package with total care agreement, IAG noted.
Willie Walsh, IAG chief executive, said: "The aircraft offers a step change in fuel burn efficiency versus our existing aircraft with improvements in fuel cost per seat of more than 20 per cent. New technology engines and improved aerodynamics will lower fuel burn leading to reduced carbon and NOx emissions.''
British Airways has 118 wide-bodied longhaul aircraft in its fleet with 42 aircraft already ordered. These ordered aircraft include 12 A380s, 24 B787s, six B777-300ERs.
Iberia has 31 wide-bodied longhaul aircraft in its fleet with six A330 aircraft already ordered.
Last month, Boeing had received a commitment from Ireland-based low cost carrier Ryanair Holdings Plc (RYAAY, RYA.L) for 175 Next-Generation 737-800 aircraft. The deal, when finalized, will be worth $15.6 billion at list prices.
IAG.L fell 2.5 percent on Wednesday to close at 254.20 pence.
by RTT Staff Writer
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